No more sudden moves. Europe, we’re looking at you. Don’t spook the economic recovery.
The annual economic forecast event Friday was a chance for Pierce County leaders and business people to get a glimpse of what might happen in 2012. There were glimmers of hope – for 2013.
This will be a muddle-through year, said Arun Raha, Washington state’s chief economist and keynote speaker at the 24th annual Tacoma-Pierce County Chamber’s Horizons breakfast. It will include “sub-par growth and tentative confidence.”
“If things don’t go wrong – and that’s all I pray for – because the risk environment around the globe is uncertain, (and) this very timid recovery could fall off the rails,” he said.
Raha’s analysis of the state’s economy was followed by a look at Pierce County, presented by University of Puget Sound professors Doug Goodman and Bruce Mann. They create a yearly Pierce County economic index and offer it at the Chamber event, held at the Greater Tacoma Convention & Trade Center.
In the United States and Pierce County, the recession is over, on paper. Last year saw Pierce County have the first full year of economic growth since 2008, when the year-old national downturn finally hit. This year also should see growth, Goodman and Mann predicted, but it might not feel like it.
About seven unemployed people will vie for each job, compared with two or three before the recession, the professors said.
Retail sales will see year-over-year increases each quarter in 2012, with the highest in the second quarter of 3.3 percent.
The housing market also will see an annual increase, but the wild-card is homes in foreclosure. They push down sale prices, and no one’s sure how long it will take to get those homes worked through the market.
Because the recession has officially ended, Goodman and Mann offered some accounting of the damage done to Pierce County during the past three years.
n The county lost 13,000 jobs. The professors’ model indicates if the recession hadn’t happened, the county would have added 46,000 jobs.
n The average annual income per Pierce County resident in 2012 will be about $44,200. If there had been no recession, that would have been about $50,300. That’s a $5 billion loss of personal income.
n This year, county retail spending will be back to the 2005 level. That’s $4.8 billion in lost sales.
Now’s a good time to take a deep breath. Raha, Goodman and Mann pointed to some encouraging signs.
“We’re going through a once-in-a-lifetime event that maybe we can talk to our grandkids about,” Raha said. “We can wear T-shirts: ‘I survived the Great Recession’ – that is, if we do. But I’m bullish!”
Raha noted that four strong sectors are adding to a new stability in the state’s economy. Aerospace, software publishing, exports and agriculture are doing quite well, while construction lags and state and local governments continue to shrink.
He worries about the exposure of U.S. banks to European financial markets, and he marked the total exposure at more than $2 trillion. A banking crisis overseas, he said, could hit banks in this country, which would lead to a lack of credit, which would sound an “echo of 2008.”
Along with possible difficulties, Raha predicted economic growth in the state: 2.2 percent by next September and 3.2 percent by September 2013.
Small business optimism is up, he said, and the relative age of cars on the road signals an upcoming demand for replacements, which would mean an uptick in state tax receipts.
Goodman and Mann said Pierce County will see more construction work in multifamily housing and health care facility renovation. They highlighted notable retail gaining a foothold, including improvements at area malls, the planned McMenamins Elks Temple and new retail in the Gig Harbor area.
Raha announced this week he’ll leave Washington at the end of January, bound for Ohio. He will become director of corporate economics with Eaton, a Cleveland power-management company. His speech Friday contained the dry wit he’s become known for in three years as the state’s chief economist.
Washington’s job- and income-growth rate will be faster than the nation’s, Raha said. In a remark that drew the biggest laugh Friday, he proposed a new economic slogan for the state – something to set the state apart from the other 49:
“We suck less than you.”
Kathleen Cooper: 253-597-8546
kathleen.cooper@thenewstribune.com
Staff writer C.R. Roberts contributed to this report.
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